MICROCAPITAL BRIEF: AEB on-lends 5.7 million dollars from the EBRD and the EU to SMEs in Armenia, mainly for “green” investments

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The European Bank for Reconstruction and Development (EBRD), a UK-based development finance institution, recently agreed to lend 5 million euros ($ 5.7 million) to Armeconombank (AEB), a Armenian bank. The aim is to finance small and medium-sized enterprises (SMEs) in the acquisition of technologies that will boost their competitiveness, in particular by reaching EU standards to improve the working conditions of employees and increase exports. AEB has agreed to allocate at least 70% of the loan proceeds to finance climate change mitigation and adaptation. The EU supports the loan with grants and technical support under the EU4Business-EBRD line of credit, a joint initiative active in Armenia, Georgia, Moldova and Ukraine.

Founded in 1988 in Armenia, AEB focuses on serving individuals, microenterprises and SMEs through 54 branches. In June 2021, the bank reported total assets of 339 billion AMD (706 million USD), outstanding loans of 208 billion AMD (433 million USD) and customer deposits totaling 56 billion AMD (117 million USD).

Founded in 1991, the EBRD seeks to support a “transition to open market economies, while promoting sustainable and inclusive growth” in 38 countries in Central Asia, Eastern Europe and North Africa. It does this by providing business advice, supporting trade finance, and investing debt and equity in backers of microenterprises and SMEs. With a focus on “promoting private and entrepreneurial initiative,” the bank disbursed around 11 billion euros (US $ 13.3 billion) for 411 projects in 2020. EBRD shareholders include 69 countries plus the EU.

By Sheen Gupta, Research Associate

Additional sources and resources

EBRD press release
https://www.ebrd.com/news/2021/ebrd-and-eu-to-fund-smes-in-armenia.html

AEB Home Page
https://www.aeb.am

Annual report AEB 2020 and annual financial statements
https://www.aeb.am/en/hashvetvutyunner/

AEB News List
https://aeb.am/fr/1179/

Previous article from MicroCapital on the EBRD
https://www.microcapital.org/microcapital-brief-ebrd-loans-50m-to-qnb-alahli-of-egypt-to-boost-green-lending-to-individuals-smes/

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